CSR Section & Rules Notified - What has changed & What remains the same
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Mohan Kumar
Feb 27, 2014, 9:15:56 PM2/27/14
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CSR Section & Rules Notified – What has changed & What remains the same
By : CS. Mohan Kumar Company Secretary, Chennai
1. Sec. 135 of the Companies Act dealing with CSR is notified vide Notification dated 27th Feb, 2014. It will be effective from 1st April 2014.
2. Every Company having networth of 500 crores or Turnover of 1000 crores or Net profit of 5 crores need to constitute a CSR committee. It shall have minimum of 3 Directors and one of them shall be independent Director.
3. Unlisted Public Company or a private Company which needs to comply with CSR provisions shall have CSR committee without the Independent Director
4. A private Company having 2 Directors alone can constitute CSR committee with 2 such Directors alone.
5. CSR Committee shall have a transparent monitoring mechanism for implementation of CSR projects.
6. 2 % of average annual net profits of last 3 years are to be spent on CSR activities.
7. CSR Rules are effective from 1st April 2014. 31st March 2014 will be the date for the purpose of “Block of 3 calendar years”.
8. CSR activities should not include the activities undertaken by the Company in its normal course of business.
9. CSR policy as approved by the committee and Board shall be displayed in the Company’s website, if any.
10. CSR activities can be done through a trust or registered society or Company established by the Company – or its Holding or subsidiary Company. If such trust is not established by the Company or its Holding or subsidiary Company, it shall have a track record of 3 years in undertaking similar projects.
11. Schedule VII of the Companies Act 2013 (remember, it was in the Act not in the Rules) - which lists out the activities that may be undertaken by the Company is modified. The first point on it earlier stated that “ To eradicate extreme hunger”, which many of the speakers at various forums (including me) used to criticize. Now the word “extreme” is removed and now companies can do CSR activities for eradicating hunger. It need not be extreme hunger.
12. Three important additions that I could see in the list of activities are:
a. Measures for the benefit of armed force Veterans, war widows and dependents.
b. Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.
c. Rural development projects.
There was an item is Schedule VII “Combat HIV, Malaria or other diseases”, which has been removed.
13. Projects or programs relating to activities undertaken by Board based on the recommendations of the CSR committee or Board will also be included (Subject to one condition – CSR Policy to state that it will cover subjects mentioned in Schedule VII )
14. For calculating Net profit of the Company, the following shall be omitted/ need not be included:
a. Any profit arising from overseas branch – whether operated as a separate Company or otherwise
b. Any dividend received from other Companies in India
15. A Foreign Company or Holding or Subsidiary Company having a branch office or project office in India shall also comply with Sec. 135 and related Rules. Turnover, Netprofit or Networth of such Company for the purpose of this calculation shall be made as per Sec. 198 and Sec. 381 of Companies Act 2013.
16. An annual report on CSR activities is to be included in Board’s report; the format of the same has been provided by MCA.
By : CS. Mohan Kumar Company Secretary, Chennai
1. Sec. 135 of the Companies Act dealing with CSR is notified vide Notification dated 27th Feb, 2014. It will be effective from 1st April 2014.
2. Every Company having networth of 500 crores or Turnover of 1000 crores or Net profit of 5 crores need to constitute a CSR committee. It shall have minimum of 3 Directors and one of them shall be independent Director.
3. Unlisted Public Company or a private Company which needs to comply with CSR provisions shall have CSR committee without the Independent Director
4. A private Company having 2 Directors alone can constitute CSR committee with 2 such Directors alone.
5. CSR Committee shall have a transparent monitoring mechanism for implementation of CSR projects.
6. 2 % of average annual net profits of last 3 years are to be spent on CSR activities.
7. CSR Rules are effective from 1st April 2014. 31st March 2014 will be the date for the purpose of “Block of 3 calendar years”.
8. CSR activities should not include the activities undertaken by the Company in its normal course of business.
9. CSR policy as approved by the committee and Board shall be displayed in the Company’s website, if any.
10. CSR activities can be done through a trust or registered society or Company established by the Company – or its Holding or subsidiary Company. If such trust is not established by the Company or its Holding or subsidiary Company, it shall have a track record of 3 years in undertaking similar projects.
11. Schedule VII of the Companies Act 2013 (remember, it was in the Act not in the Rules) - which lists out the activities that may be undertaken by the Company is modified. The first point on it earlier stated that “ To eradicate extreme hunger”, which many of the speakers at various forums (including me) used to criticize. Now the word “extreme” is removed and now companies can do CSR activities for eradicating hunger. It need not be extreme hunger.
12. Three important additions that I could see in the list of activities are:
a. Measures for the benefit of armed force Veterans, war widows and dependents.
b. Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.
c. Rural development projects.
There was an item is Schedule VII “Combat HIV, Malaria or other diseases”, which has been removed.
13. Projects or programs relating to activities undertaken by Board based on the recommendations of the CSR committee or Board will also be included (Subject to one condition – CSR Policy to state that it will cover subjects mentioned in Schedule VII )
14. For calculating Net profit of the Company, the following shall be omitted/ need not be included:
a. Any profit arising from overseas branch – whether operated as a separate Company or otherwise
b. Any dividend received from other Companies in India
15. A Foreign Company or Holding or Subsidiary Company having a branch office or project office in India shall also comply with Sec. 135 and related Rules. Turnover, Netprofit or Networth of such Company for the purpose of this calculation shall be made as per Sec. 198 and Sec. 381 of Companies Act 2013.
16. An annual report on CSR activities is to be included in Board’s report; the format of the same has been provided by MCA.
*****************
This is a very quick analysis; any comments, observations or errors in this analysis/ interpretation may be kindly informed to us & we shall stand corrected. Thanks
vivekhe...@gmail.com
Feb 27, 2014, 9:44:59 PM2/27/14
to csmy...@googlegroups.com
Dear Sir,
Thank you for this.
You said 31.03.14 will be the date for calculating block of three years. It means block will start from 01.04.11.
For calculating average net profit of three preceding years, should we also consider the net losses in any of these years?
Sent from my HTC
----- Reply message -----
From: "Mohan Kumar" <needa...@gmail.com>
To:
Subject: [CSMysore] CSR Section & Rules Notified - What has changed & What remains the same
Date: Fri, Feb 28, 2014 7:45 am
*CSR Section & Rules Notified - What has changed & What remains the same*
*By : CS. Mohan Kumar Company Secretary, Chennai *
1. Sec. 135 of the Companies Act dealing with CSR is notified vide
Notification dated 27th Feb, 2014. It will be effective from 1st April
2014.
If such trust is not established by the Company or its Holding or
subsidiary Company, it shall have a track record of 3 years in undertaking
similar projects.
11. Schedule VII of the Companies Act 2013 (remember, it was in the Act not
in the Rules) - which lists out the activities that may be undertaken by
the Company is modified. The first point on it earlier stated that " To
eradicate extreme hunger", which many of the speakers at various forums
(including me) used to criticize. Now the word "extreme" is removed and now
companies can do CSR activities for eradicating hunger. It need not be
extreme hunger.
12. Three important additions that I could see in the list of activities
are:
a. Measures for the benefit of armed force Veterans, war widows and
dependents.
b. Contributions or funds provided to technology incubators located within
academic institutions which are approved by the Central Government.
c. Rural development projects.
There was an item is Schedule VII "Combat HIV, Malaria or other diseases",
which has been removed.
13. Projects or programs relating to activities undertaken by Board based
on the recommendations of the CSR committee or Board will also be included
(Subject to one condition - CSR Policy to state that it will cover subjects
mentioned in Schedule VII )
14. For calculating Net profit of the Company, the following shall be
omitted/ need not be included:
a. Any profit arising from overseas branch - whether operated as a separate
Company or otherwise
b. Any dividend received from other Companies in India
15. A Foreign Company or Holding or Subsidiary Company having a branch
office or project office in India shall also comply with Sec. 135 and
related Rules. Turnover, Netprofit or Networth of such Company for the
purpose of this calculation shall be made as per Sec. 198 and Sec. 381 of
Companies Act 2013.
16. An annual report on CSR activities is to be included in Board's report;
the format of the same has been provided by MCA.
*****************
This is a very quick analysis; any comments, observations or errors in this
analysis/ interpretation may be kindly informed to us & we shall stand
corrected. Thanks
Regards
A. Mohan Kumar
Mail : needa...@gmail.com
Phone : 90030 12871
--
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Mail your comments, feedback and suggestions on CSMysore to Moderator: datta...@gmail.com and Manager: vivekhe...@gmail.com
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Thank you for this.
You said 31.03.14 will be the date for calculating block of three years. It means block will start from 01.04.11.
For calculating average net profit of three preceding years, should we also consider the net losses in any of these years?
Sent from my HTC
----- Reply message -----
From: "Mohan Kumar" <needa...@gmail.com>
To:
Subject: [CSMysore] CSR Section & Rules Notified - What has changed & What remains the same
Date: Fri, Feb 28, 2014 7:45 am
*CSR Section & Rules Notified - What has changed & What remains the same*
*By : CS. Mohan Kumar Company Secretary, Chennai *
1. Sec. 135 of the Companies Act dealing with CSR is notified vide
Notification dated 27th Feb, 2014. It will be effective from 1st April
2014.
2. Every Company having networth of 500 crores or Turnover of 1000 crores
or Net profit of 5 crores need to constitute a CSR committee. It shall have
minimum of 3 Directors and one of them shall be independent Director.
3. Unlisted Public Company or a private Company which needs to comply with
CSR provisions shall have CSR committee without the Independent Director
4. A private Company having 2 Directors alone can constitute CSR committee
with 2 such Directors alone.
5. CSR Committee shall have a transparent monitoring mechanism for
implementation of CSR projects.
6. 2 % of average annual net profits of last 3 years are to be spent on CSR
activities.
7. CSR Rules are effective from 1st April 2014. 31st March 2014 will be the
date for the purpose of "Block of 3 calendar years".
8. CSR activities should not include the activities undertaken by the
Company in its normal course of business.
9. CSR policy as approved by the committee and Board shall be displayed in
the Company's website, if any.
10. CSR activities can be done through a trust or registered society or
Company established by the Company - or its Holding or subsidiary Company.or Net profit of 5 crores need to constitute a CSR committee. It shall have
minimum of 3 Directors and one of them shall be independent Director.
3. Unlisted Public Company or a private Company which needs to comply with
CSR provisions shall have CSR committee without the Independent Director
4. A private Company having 2 Directors alone can constitute CSR committee
with 2 such Directors alone.
5. CSR Committee shall have a transparent monitoring mechanism for
implementation of CSR projects.
6. 2 % of average annual net profits of last 3 years are to be spent on CSR
activities.
7. CSR Rules are effective from 1st April 2014. 31st March 2014 will be the
date for the purpose of "Block of 3 calendar years".
8. CSR activities should not include the activities undertaken by the
Company in its normal course of business.
9. CSR policy as approved by the committee and Board shall be displayed in
the Company's website, if any.
10. CSR activities can be done through a trust or registered society or
If such trust is not established by the Company or its Holding or
subsidiary Company, it shall have a track record of 3 years in undertaking
similar projects.
11. Schedule VII of the Companies Act 2013 (remember, it was in the Act not
in the Rules) - which lists out the activities that may be undertaken by
the Company is modified. The first point on it earlier stated that " To
eradicate extreme hunger", which many of the speakers at various forums
(including me) used to criticize. Now the word "extreme" is removed and now
companies can do CSR activities for eradicating hunger. It need not be
extreme hunger.
12. Three important additions that I could see in the list of activities
are:
a. Measures for the benefit of armed force Veterans, war widows and
dependents.
b. Contributions or funds provided to technology incubators located within
academic institutions which are approved by the Central Government.
c. Rural development projects.
There was an item is Schedule VII "Combat HIV, Malaria or other diseases",
which has been removed.
13. Projects or programs relating to activities undertaken by Board based
on the recommendations of the CSR committee or Board will also be included
mentioned in Schedule VII )
14. For calculating Net profit of the Company, the following shall be
omitted/ need not be included:
Company or otherwise
b. Any dividend received from other Companies in India
15. A Foreign Company or Holding or Subsidiary Company having a branch
office or project office in India shall also comply with Sec. 135 and
related Rules. Turnover, Netprofit or Networth of such Company for the
purpose of this calculation shall be made as per Sec. 198 and Sec. 381 of
Companies Act 2013.
16. An annual report on CSR activities is to be included in Board's report;
the format of the same has been provided by MCA.
*****************
This is a very quick analysis; any comments, observations or errors in this
analysis/ interpretation may be kindly informed to us & we shall stand
corrected. Thanks
Regards
A. Mohan Kumar
Mail : needa...@gmail.com
Phone : 90030 12871
--
************************************************
Mail your comments, feedback and suggestions on CSMysore to Moderator: datta...@gmail.com and Manager: vivekhe...@gmail.com
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ramela rangasamy
Feb 27, 2014, 10:58:55 PM2/27/14
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Mr.Mohan
It is Block of three financial years. Not calender year.
Ramela
It is Block of three financial years. Not calender year.
Ramela
Simranjeet Singh
Feb 28, 2014, 12:29:23 AM2/28/14
to csmy...@googlegroups.com
thanks for sharing sir......companies need to spend 2% of the average N.P earned during 1 Apr, 2010-31 March 11,1 April 2011- 31st March, 12, 1 Apr 2012-31st March13.. N.P to be calculated as per Section 198 of the CA, 2013.
Thanks & Regards
ACS Simranjeet Singh
Bharti Ahuja
Feb 28, 2014, 12:43:54 AM2/28/14
to csmy...@googlegroups.com
Sir,
the rules states for reporting that the board report from financial year 01 April 2014 should indicate CSR related particulars.
Does that mean board for FY ended on 31 March 2014 will be made on the previous format of previous years?
Are the rules provide relaxation from CSR reporting for FY 31 March 2014?. Please enlighten.
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************************************************
Mail your comments, feedback and suggestions on CSMysore to Moderator: datta...@gmail.com and Manager: vivekhe...@gmail.com
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Bharti.
Simranjeet Singh
Feb 28, 2014, 12:48:00 AM2/28/14
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yes Ms. Bharti Ahuja you r right CSR provisions will be applicable for the fy starting frm 1.4.2014 and ending on 31.3.2015
Thanks & Regards
ACS Simranjeet Singh
Cs Shanu
Mar 3, 2014, 6:30:02 AM3/3/14
to csmy...@googlegroups.com
In case of unlisted Public company. How many directors are required to form CSR Committee. In case there is no Independent director.
How to for CSR committee
Bhavani Prasad
Mar 3, 2014, 6:38:17 AM3/3/14
to csmy...@googlegroups.com
Dear Shanu Bhandari
An unlisted co/pvt co u/sec135(1) of CA 2013 which is not requited to appoint indipendent director shall have its CSR committee without such director
An unlisted co/pvt co u/sec135(1) of CA 2013 which is not requited to appoint indipendent director shall have its CSR committee without such director
Regards
CS Bhavani Prasad C N
Company Secretary
098665 19059
CS Bhavani Prasad C N
Company Secretary
098665 19059
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